Insurance broker vs going direct — how it works in the UK

Buying insurance in the UK generally comes down to two routes — going directly to an insurer yourself, or using an insurance broker to do the comparing and, often, the negotiating on your behalf. Neither route is universally better; they simply work differently, and it is worth understanding both before deciding which suits a particular policy or situation.

An insurance broker's role is to assess what cover you actually need, compare products across a range of insurers rather than just one, and help arrange the policy — and, in many cases, provide support if you later need to make a claim. Because a broker is not tied to a single insurer's own products, they can, in principle, place cover with whichever insurer in their panel best fits your circumstances, which matters more for some types of insurance — commercial or more specialist cover, for example — than for simple, standardised products.

The British Insurance Brokers' Association, usually shortened to BIBA, is the trade body for the sector, representing more than 1,700 regulated broking firms across the UK. BIBA advises its member firms, government and regulators on issues affecting the sector, and it runs a "Find Insurance" service that directs public enquiries toward member broking firms — useful context for understanding who represents brokers as an industry, though membership of BIBA is not itself a guarantee of any particular outcome for an individual policy.

How a broker is actually paid is worth understanding, since it varies and is not always obvious from the outside. Brokers commonly receive commission from the insurer, calculated as a proportion of the premium, and this varies by insurer and by the type of cover involved — commission on some classes of business is typically higher than on others. Some brokers also charge fees directly, such as an administration fee for making changes to a policy during its term, separate from commission. Under the Insurance Distribution Directive rules that apply across the UK insurance market, a broker is required to tell you the nature and basis of their remuneration before you take out the policy, and again if the policy is later amended or renewed — so asking directly how a broker is paid on a specific policy is a reasonable, and answerable, question.

Add-ons are another area worth understanding rather than automatically accepting or declining. Products such as legal expenses cover, key cover, or breakdown cover are commonly offered alongside a main policy — home or motor insurance, for example — and can generate additional commission for whoever arranges them, whether that is a broker or a direct insurer's own sales process. That is not a reason to assume an add-on is poor value; some people find real use in specific add-ons, and others do not need them. It simply means it is worth actively checking what each add-on actually covers, whether you might already have similar cover elsewhere, such as through a bank account package or an employer benefit, and, if you want it, whether it is available more cheaply as a standalone product — rather than accepting it automatically as part of a bundle.

Going directly to an insurer, by contrast, means dealing with one company's own products and their own sales team rather than a broker's wider panel — which can be simpler for a straightforward policy, but means you are only seeing what that one insurer offers, without a broker's comparison across the market or, in many cases, their support if a claim later becomes complicated.

For simple, highly standardised products, such as basic single-car motor cover, price comparison websites and going direct often cover most of the market between them, which is part of why brokers tend to be used less for these. For more specialist or complex cover — commercial insurance, unusual property risks, high-value possessions, or situations where a previous claim or an unusual circumstance makes standard online quotes unhelpful — a broker's market knowledge and access to insurers who do not sell directly to the public tends to matter more. Which route suits a given policy is a genuinely case-by-case question rather than one with a single right answer.

This article is general information, not financial advice, and it does not recommend a broker over going direct, or any specific broker, insurer or add-on. Our directory lists UK insurance brokers by area, and asking directly how a broker is paid, and what any add-on actually covers, remains the most reliable way to understand what you are being offered before you buy.

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